This month’s notable U.S. Supreme Court (SCOTUS) actions involve what the Court declined to review rather than any actual decisions.
- Declined to review: Fuel blenders exemption under the EPA’s RFS program
On May 18, 2020, SCOTUS declined to review the U.S. Environmental Protection Agency’s (EPA) policy that fuel blenders are not responsible for mixing biofuels into gasoline. This policy is part of the EPA’s renewable fuel standard (RFS) program, which requires an increasing amount of renewable fuels be blended into U.S. transportation fuels. This means the D.C. Circuit opinion (below) on the issue remains unchanged.
In August 2019, the Seventh Circuit held the EPA’s decision not to revise the RFS program so that the regulatory point of obligation included blenders in addition to refiners and importers.
In their petition for writ of certiorari, Petitioners argued that the Clean Air Act (CAA) requires the EPA to review and move the RFS’ point of obligation annually when the agency decides on the amount of renewable fuels that must be blended into the nation’s fuel supply. Petitioners claimed that the EPA acted unreasonably by failing to adjust the point of obligation.
The EPA responded that the CAA and the RFS program are structured so that when the EPA sets the annual renewable fuels volumes each year, the agency does not have to reconsider the structure of the RFS program as a whole. Under the program’s statutory deadlines, the EPA only has a small window of time to evaluate the renewable fuels market and craft annual requirements. As a result, the EPA contends that Congress could not have expected it to perform an entire reevaluation of where to set the point of obligation each time the agency issued new compliance requirements.
Petitioners replied that the EPA’s exemption of fuel blenders from the obligation to meet RFS requirements creates perverse incentives in the renewable fuel credits market. Under the program, blenders and refiners can use renewable identification numbers (RINs) to meet RFS requirements; however, because blenders are exempt from meeting the mixing standards, they can hoard RINs in order to drive up their price before selling them to refiners.
In its August 2019 decision, the D.C. Circuit concluded that the EPA reasonably explained that there is no misalignment of incentives as Petitioners describe. The D.C. Circuit also found the agency’s determination that shifting the point of obligation would create uncertainty in the marketplace reasonable. Finally, two of the panel’s three judges concluded that the EPA properly rejected the claim that it must annually reassess the point of obligation.
- Declined to review: Statute of limitations trigger under CERCLA
On May 26, 2020, SCOTUS declined to review a Seventh Circuit decision forcing a steel company to pay the majority of the cleanup costs at an Indiana steel mill site. This means the Seventh Circuit opinion (below) on the issue remains good law.
The Seventh Circuit held that under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), a remedial action “must substantially resolve the bulk of the pollution at the entire site” in order to trigger the six-year statute of limitations.
On appeal to SCOTUS, Petitioners argued that the Seventh Circuit applied an incorrect standard for when a cleanup action is considered “remedial” under CERCLA. As a result, Petitioners claimed that the Seventh Circuit inaccurately allowed a six-year, rather than three-year, statute of limitations.
During the 1980s and 1990s, an intervening owner undertook efforts to partially clean up the site. Petitioners argued that these efforts were considered “remedial” action under CERCLA and started the clock on the statute of limitations.
Respondent filed suit in 2010 after conducting five years of cleanup work. Respondent acquired the site in a bankruptcy proceeding.
The Seventh Circuit upheld the district court’s ruling that Petitioner is responsible for Respondent’s cleanup costs as the “undisputed” source of the pollution problems during its operation of the site from 1928 to 1981.
Additionally, the Seventh Circuit Court classified the intervening landowner’s cleanup actions as “removal” rather than a longer-term “remedial” action that would start the six-year statute of limitations period. The court stated that a cleanup action “must substantially resolve the bulk of the pollution at the entire site” to be classified as remedial. Here, the intervening landowner’s efforts included removing sludge and installing a concrete cap in one area of the site. The Seventh Circuit stated that the concrete cap was limited to just one spot and did not qualify as “substantially resolv[ing] the bulk of the site’s ongoing pollution problems.”